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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
Litigation Release No. 15180 / December 9, 1996
SECURITIES AND EXCHANGE COMMISSION V. CHARLES BRUMFIELD, JOSEPH
BRUMFIELD, ROBERT ALLEN, WILLIAM MYLETT, JOSEPH PENNA, JOSEPH
CUSIMANO, ALFRED VOLPE, JAMES GALANTE, THOMAS ALGER, JOHN
O'BRIEN, LAWRENCE FRIEDMAN, ROBERT FLANAGAN, THOMAS FLANAGAN,
SHARON SEIDEN, WARREN SMITH, JOHN LYNCH, AND ALBERT BRODY, United
States District Court for the Southern District of New York, Civ.
Action No. 95-9283 (JES).
On December 6, 1996, the United States District Court for
the Southern District of New York entered a Final Judgment of
Permanent Injunction and Other Equitable Relief against Charles
Brumfield. The Commission's Complaint charged Charles Brumfield
with violations of the federal securities laws by
misappropriating confidential information from AT&T concerning
its plans to acquire Paradyne Corporation, NCR Corporation,
Digital Microwave Corporation, and Teradata Corporation, by
trading Teradata in his own account, and by providing the non-
public information about one or more of the four acquisition
targets to his son and several friends who subsequently traded in
the relevant securities while in possession of the non-public
information. The Complaint also charged that Charles Brumfield
arranged for several of his direct and indirect tippees to trade
the securities of target companies for him and to kick back
profits in the form of cash and other concealed payments.
Without admitting or denying the allegations in the Complaint,
filed on October 31, 1995, Charles Brumfield consented to the
entry of an injunction from future violations of sections 10(b)
and 14(e) of the Securities Exchange Act of 1934 and rules 10b-5
and 14e-3 thereunder, disgorgement of his profits of $311,643.89,
plus prejudgment interest in the amount of $190,375.03, and a
civil penalty in the amount of $311,643.89.
In a related criminal case Charles Brumfield earlier pled
guilty to one count of conspiracy to commit securities fraud,
wire fraud, and obstruction of agency proceedings, and one count
of perjury. Brumfield was sentenced on October 22, 1996 to four
years probation, six months in a community treatment center, and
fined $6,000.
On September 16, 1996, the United States District Court for
the Southern District of New York entered a Final Judgment of
Permanent Injunction and Other Equitable Relief against Albert
Brody. The Commission's Complaint charged Albert Brody with
violations of the federal securities laws by trading in the
securities of NCR and Teradata while in possession of non-public
information. Without admitting or denying the allegations in the
Complaint, filed on October 31, 1995, Albert Brody consented to
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the entry of an injunction, disgorgement of his profits of
$71,800.36, plus prejudgment interest in the amount of
$37,789.26. The Final Judgment also acknowledges that Brody paid
a one-time penalty in the amount of $100,000 in the parallel
criminal proceeding.
In the related criminal case Brody earlier pled guilty to
one count of conspiracy to commit securities fraud, wire fraud,
and obstruction of agency proceedings in the parallel criminal
action. On June 7, 1996, he was sentenced to three years
probation, six months home detention, and fined $100,000.
Litigation with respect to the remaining defendants is
continuing.
Related Releases: L.R. 14706, L.R. 14779, L.R. 14956